Universal Credits - Self Employed

princessdon

The best skill I am giving my children is language. My OH's family is from Italy (and so the MIL and older family members speak Italian as the main language), so that has always been part of their upbringing, but they also learn, French, German and Spanish (we have property overthere) and they are learning Mandarin.

I don't think their future will be the UK and I want them to have as much opportunity as possible. If they didn't wish to do this, I'd stop of course, but they like it and in part it's convenient. Eg my eldest's best friend mother is German but fluent in French and lost her job in the UK so she teaches German / French to students after school. I'd pay £17 for after school or she can go to her best friends 2 nights a week where I pay £10 for a 45 min lesson (she then stays for a bit). She'd rather be there than in out of schools.

My youngest sibling moved to China after doing a degree in Chinese Business and she teaches her Mandarin over Skype.

I have no faith in the country of our future.

I am in my 30's and so glad I bought my home at 19 as I couldn't afford the home I live in now if buying now (if that makes sense).

agme28

Blue22 wrote: »

Yes I agree if you mean those with a high proportion of income paid as benefits.

But it has not been so great for those trying to help themselves....This is a post I copied from HPC which I found really sad.

I too have had enough. It is not an angry "had enough", I've gone beyond that now. Instead, it is a kind of sad resignation that nothing I do makes any difference.

We have lived like misers for six years. We have saved everything we could. My OH has done hundreds of hours of overtime. I have taken every freelance work I could on top of my own job. All in all, I have mostly sat in front of a damn monitor 12 hours plus a day for seven days a week, only taking time off when I felt my head might explode. I am now in my late 30s, I want to have a child, but the house we rent is not safe nor appropriate for a baby. Then, two weeks ago, a three-bed terrace back-to-back near us on a main road with no garden, garage or drive went on the market for £290k.

I saw that ad and something inside me just broke. The house in question is a horrid place; no one in their right mind would pay over £160K for it. But the fact the EA had even thought it viable to stick it up that that price just made me realise how insane EAs and vendors have become --- and I realised that it is just not going to end, not unless something enormous happens, which would no doubt take us down with it. We make reasonable offers but vendors are so deluded, they think their two-bed semis with no kitchen and no electrics, sitting by a main road, are somehow worth £220K plus.

People say "live your life" but it isn't that easy. At some point, we will have to move and the awareness of that makes us anxious about spending money that could be put into the deposit pot -- so life is on hold, and has been for six years. I'd love to go, but we would still need to earn a living, and my parents are getting on now.

We've just found ourselves in a kind of hell. I go to work and it just seems to be getting worse and worse out there. No one smiles anymore. My mum took me to a play a few months ago, and I couldn't believe our local town centre at night. It's like a drunken kindergarten with street angel "nannies" stopping the infants from collapsing and braining themselves on the concrete. When I go away, I find it so bizarre how there is a "proper society" with old people and families and children out at night, no matter their creed, even in places where there has been a civil war in the last thirty years

God bless you, I really feel for you. I feel for all of us, struggling in our own ways....and so desperately wishing society was more harmonious and less hostile. I sometimes panic worrying about the world I have brought my innocent children into. I sometimes feel guilty for having them when society seems to have lost it's way.

Blue22

agme28 wrote: »

God bless you, I really feel for you. I feel for all of us, struggling in our own ways....and so desperately wishing society was more harmonious and less hostile. I sometimes panic worrying about the world I have brought my innocent children into. I sometimes feel guilty for having them when society seems to have lost it's way.

Thankyou but it wasn't my post, just one I copied from another forum to highlight how tough it is for some middle income earners.

And I guess the only way society will get back on track is if enough of us want to change it

dktreesea

leveller2911 wrote: »

Blue22 wrote: »

We receive child benefit for 2 children, we don't receive tax credits at all as our family income is approx £33k gross.I don't feel "stigmatised" at all as its my obligation not the States.We are a net contributing family and receive little back compared to what we contribute.

Sorry to burst your bubble but anyone on a modest income with children who believes because they pay income tax they are a net contributor is deluding themselves.

The income tax on £33k plus any VAT incurred along the way, not to mention fuel duty and all the extra add-ons that make us a heavily taxed nation, would be unlikely to even cover the cost of educatiing your children in the state system, let alone your share of the NHS, the actual costs of doctors visits, the cost of maintaining the roads, of heavily subsidised water, etc etc. (Why they still charge water rates down south escapes me; whatever people pay wouldn't come close to maintaining the infrastructure required to produce the quality of water that runs out of the tap).

dktreesea

Blue22, are you serious? Someone having a whinge because they can't afford to pay £220k for a house? How many people in Britain do you think can afford that, let alone £290k also mentioned in the same post? They sound like they have no common sense.

There are plenty of places, including in England, where even £220k would buy you a decent 3 bedroomed house. And a lot nicer and better value for money than in the south. And the situation of the couple you post about, i.e. delaying their family because they want to accumulate more wealth, is exactly the situation the government is not going to reward.

If that couple are serious about starting a family, they would do well to move somewhere where they can afford a nice house, accept more modest wages and produce the children the government is so intent on getting us/financially bribing us all to have; like many of the rest of us.

I come from an expensive place to live; London. I wouldn't be so dumb as to inflict a London mortgage on myself at today's prices. Not when there are so many much nicer places to live in the UK.

Ah, the pleasure of being self employed. You get to live wherever you want, with little or no income disadvantages.

Royza

Ok, can anyone fill me in on this as I've not followed the UC debate. We run a small business as a partnership (equal shares) and we both work over 30 hours per week. We both claim full WTC (but not HB or any other benefit) - profit has normally been reasonable but below the threshold to reduce eligibility. How will we be affected by Universal Credit?

dktreesea

Royza wrote: »

Ok, can anyone fill me in on this as I've not followed the UC debate. We run a small business as a partnership (equal shares) and we both work over 30 hours per week. We both claim full WTC (but not HB or any other benefit) - profit has normally been reasonable but below the threshold to reduce eligibility. How will we be affected by Universal Credit?

At the moment the proposal is that the assessment for UC will be based on the higher of the full time NMW or the actual profit, on a month to month basis. it doesn't necessarily follow that the UC will give you less money than you currently get. Whereas now the profit for the full year determines what you get, in the future the proposal currently is to do this on a month by month basis. So in the months where your profit is low you would presumably get an amount equal to whatever the couple would receive if both worked full time at the NMW.

Royza

Thank you for your reply dktreesea - appreciated.

The more I've researched this the more confused I get. None of it to me seems to be good at all, but the worst for me is that I probably won't get Universal Credit at all - it is subject to a £16000 limit on savings where Working Tax Credit had no test for capital, so I will lose all entitlement after transitional provisions expire, unless I can shuffle off this capital somewhere of course.

Some might not have much sympathy for me here. However, this change will impact a lot of people who have worked and saved up a bit of capital for a rainy day - in my case I rent a house and this capital may well go towards maybe buying one in the future. I have a few thousand above the £16,000 by the way. So, within maybe a year to four years I will lose the working tax credit income altogether, and this has been important to me in recent years. And this will happen because I have saved. Great incentive eh?

Also, the monthly reporting requirements of the UC will be very onerous for small business people, and will not take account of the business cycle properly (lower income and working hours in winter in my case). Let's hope this lot never comes to pass and the next elections comes before it.

dktreesea

Royza wrote: »

Thank you for your reply dktreesea - appreciated.

The more I've researched this the more confused I get. None of it to me seems to be good at all, but the worst for me is that I probably won't get Universal Credit at all - it is subject to a £16000 limit on savings where Working Tax Credit had no test for capital, so I will lose all entitlement after transitional provisions expire, unless I can shuffle off this capital somewhere of course.

Some might not have much sympathy for me here. However, this change will impact a lot of people who have worked and saved up a bit of capital for a rainy day - in my case I rent a house and this capital may well go towards maybe buying one in the future. I have a few thousand above the £16,000 by the way. So, within maybe a year to four years I will lose the working tax credit income altogether, and this has been important to me in recent years. And this will happen because I have saved. Great incentive eh?

Also, the monthly reporting requirements of the UC will be very onerous for small business people, and will not take account of the business cycle properly (lower income and working hours in winter in my case). Let's hope this lot never comes to pass and the next elections comes before it.

I really don't understand why the allowed capital is set at £16k. I've lived in places, Australia for example, where that particular allowance was set at $3,000. Surely it is reasonable for other people to expect that people, including the self employed, will live off their own funds before digging into a stranger's pockets and helping themselves to their money as well?

However, be that as it may, there are workarounds if you are self employed. Some of these would be available to employed people as well.

1) Use the money to retire any debt you may have. Having £16k in the bank and more than £16k in loans, particularly high interest ones of the unsecured variety, like credit cards, is a road to ruin. From memory using capital to retire debt isn't regarded as depriving yourself of capital for things like housing benefit. Likewise for UC.

2) Invest some or all of it in the business. E.g. increase or improve levels of stock. By the time UC comes in, this will no longer be business expansion but business maintenance. So the asset by then will be a business asset and outside the scope of the UC.

3) Consider improving the quality of what you get for your money on the overheads side of the equation. For example, getting a business lease for a new vehicle. Yes, it will reduce your profit, but it will probably save you costs in petrol and repairs and maintenance, plus you will have the pleasure of driving a brand new vehicle.

If you use a computer consider upgrading it and/or your broadband connection. Skimping on these two is probably a significant cause of loss of productivity for any business that trades on, or relies on the internet for all or part of its revenue producing activites.

Lower income at any time of the year, under the present proposals, is likely to increase what you get on UC if the current system, of basing benefits entitilements on a year's profit, would be sufficient profit to reduce your entitlement across the whole year under the current system.

Royza

Thanks again dktreesea. Your point about the savings set aside limit is a political one. Personally I think saving should be encouraged in society and penalising it in the benefits system does the opposite. I agree with the rest of your advice in so far as this policy will encourage people like me to keep capital below the £16,000 by any means available. I would add though that it isn't a simple cut off at this level - there is also withdrawal of £1 a week for every £250 between I think £6000 and £16000. This means I would have to unload lots of cash on something to be unaffected totally, so will still be penalised for having saved up cash, despite not being a rich man in terms of capital (I'm probably worth £25,000 in total assets - no debt - and have nothing else). If I could manage to sink this amount into a house or an expensive new car even I wouldn't be penalised in this way - is that fair?

Several bodies are flagging up how Universal Credit will negatively impact self-employed people with savings or none. Although maybe not me, it will force many of them onto Jobseekers allowance, costing the Government more and discouraging enterprise.